In the vast majority of cases, partners, members of LLCs and board members of smaller private corporations will have signed an agreement outlining their responsibilities and rights in a relationship.
However, the law also creates different fiduciary relationships between business associates.
By way of example, partners in a business have a fiduciary relationship with each other, and board members of a corporation are fiduciaries of the corporation and all of the corporate shareholders.
A person who is in a fiduciary relationship have certain legal obligations that exist independent of any contract.
The full nature and extent of these obligations depends a lot on the facts and circumstances, so specific questions about how they work in Ohio should be directed to an experienced business law attorney.
The general idea, though, is that a person in a fiduciary relationship has to put the interest of the other people in the partnership, or the shareholders of the corporation, ahead of her own.
A flagrant example of a breach of fiduciary duty would be the case of a partner who funnels income belonging to the partnership to his personal bank account without offering to divide it.
Breach of fiduciary duty is a separate legal claim
Not every poor decision or business disagreement is a breach of fiduciary duty. However, many times, an investigation into a corporate legal issue will reveal that a person in a leadership role has not been faithful to her fiduciary obligations.
Should this be the case, the victim may consider pursuing a legal claim for damages, provided that he experienced a loss. Breach of fiduciary duty is a separate legal claim which entitle a person to additional compensation above and beyond what is available through other claims. In some cases, punitive damages may even be available.
